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Help & advice

Personal Injury Trusts – How to protect your state benefits after a serious injury claim

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Why do I need a Personal Injury Trust after a serious injury claim?

A Personal Injury Trust allows you to keep all of your compensation and your means-tested state benefits, in the event your award for serious injury compensation will take you over the means-tested threshold, potentially removing any entitlement to your benefits.

A Personal Injury Trust will need to be considered in all personal injury cases to ensure you are able to protect your benefits as best as possible.

Your Serious Injury Compensation

Receiving £6000 or more in compensation could remove your entitlement to means-tested state benefits. A Personal Injury Trust means your compensation will be ignored if you or other members of your close family currently claim, or need to claim in the future, means-tested benefits.

If you receive a large lump sum and have plans to spend all of the money in a short space of time, this does not necessarily mean your benefits are protected. Even if the money is no longer available to you at the time of the benefits assessment, the fact you have been awarded this sum will still be taken into consideration. Therefore even if you intend to spend your compensation immediately, you will still need to consider setting up a Personal Injury Trust to protect your benefits.

What benefits are affected by compensation claims?

A lump sum compensation payment can affect certain means-tested state benefits which are most common, but not limited to:

  • Income Support
  • Jobseekers Allowance
  • Employment Support Allowance
  • Housing Benefit

If you or your partner receive any of the above benefits, or, you consider you will want to apply for any of the above benefits in the future, in order to ensure your injury compensation is not included in your means-tested benefit assessment, you should consider whether you need to set up a Personal Injury Trust.

How do I set up a Personal Injury Trust?

You will need to set up your Personal Injury Trust within 1 year of receipt of your first payment of compensation. If you receive an interim payment (early compensation payment) prior to your claim settling in full, it would be worthwhile considering whether the trust should be set up at that stage.

Your solicitor at CFG Law will be able to provide you with additional information about Personal Injury Trusts and will be able to give you details of independent financial advisors who can make the required arrangements for you.

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